Vendor finance is when the seller leaves part of the purchase price in the deal, repaid over an agreed term after settlement. Structured properly, it can bridge a 10–20% deposit gap, reduce the bank debt you need — and it signals the seller's own confidence in the business, something credit assessors read favourably.
We look at the purchase price, your deposit and what lenders will fund for this business type — and quantify exactly how much a vendor finance component would need to cover.
We help you shape a vendor finance proposal the seller can say yes to — amount, term, repayments and security — before it goes anywhere near the contract of sale.
The critical step. Lenders have firm rules on vendor loans — ranking, repayment start dates, deeds of priority. We structure the mix so the bank debt and vendor loan work together, not against each other.
Your solicitor documents the vendor loan; we run the lender application in parallel and manage conditions so the two settle on the same timeline.
You take ownership, repay the vendor over the agreed term, and when it's cleared we can review the structure — often the point to refinance or fund the next stage of growth.
"A vendor loan the lender hasn't approved can sink the whole application. The order of operations matters — structure first, contract second." — Pooja
When your deposit falls 10–20% short of what the lender requires
Acquisition Finance →
The seller's skin in the game strengthens how lenders view the business
Buying a Business →
Keeps the outgoing owner invested through the handover period
How handovers work →
Succession sales where the buyer is known but capital is limited
Succession funding →Every vendor loan is a private negotiation between buyer and seller, documented by solicitors. Ranges below are indicative of common market practice only — and the incoming lender must approve the structure.
| Element | Typical range | What decides it |
|---|---|---|
| Portion of purchase price | 10–30% | Size of the deposit gap and seller's willingness |
| Term | 1–5 years | Business cash flow after lender repayments |
| Repayment style | Interest-only, P&I or lump sum | Negotiated; lenders often require deferral in year one |
| Security ranking | Behind the lender | Deed of priority — the bank always ranks first |
| Lender treatment | Some lenders count vendor finance toward your equity contribution; others don't. Which lender you apply to changes what the structure is worth. | |
Before anything goes in the contract of sale, we'll map how lenders on our panel treat the vendor loan — and which structure protects your approval.
$1.3M · settled in 4 weeks
50% funded · settled in 3 weeks
$220k · 75% funded · settled in 4 weeks
Client results are individual and not a guarantee of outcomes. Details have been anonymised.
Before founding Probiz, Pooja spent years inside NAB and ANZ. Vendor finance done badly is a red flag to a lender — wrong ranking, repayments starting too early, no deed of priority — and applications get declined on structure the buyer never knew was wrong. Having assessed deals from the lender's chair, she structures the vendor component so it strengthens your application instead of sinking it.
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Vendor finance (also called seller finance) is when the person selling the business leaves part of the purchase price in the deal as a loan to you, repaid over an agreed term after settlement. You pay less upfront, the seller receives the balance over time, and the terms are documented in a formal loan agreement prepared by solicitors.
No — the vendor loan is a private agreement between you and the seller. Our role is structuring it alongside the lender funding: making sure the amount, term, ranking and repayment schedule are something your lender will approve, and running the bank application in parallel so both parts settle together.
It depends on the lender. Some treat a properly subordinated vendor loan as strengthening the deal; others still want to see a minimum genuine cash contribution from you regardless. This is exactly why lender selection matters — the same structure can be worth 20% of the purchase price at one lender and nothing at another.
It widens the pool of buyers who can afford the business, can support a higher sale price, and gives the seller ongoing income on the deferred portion. It's most common where the seller is motivated to exit, confident in the business's performance, or selling to a known buyer such as a manager or family member.
The main ones: repayments to the vendor starting before the business can afford them, a vendor loan structure the incoming lender won't accept, and personal guarantees or security clauses that conflict with the bank's requirements. The loan agreement should always be reviewed by your solicitor before you sign the contract of sale.
Yes — that's the most common use. A typical structure is your cash deposit plus lender funding plus a vendor finance component covering the gap. The lender will require the vendor loan to rank behind them, usually under a deed of priority, and may set conditions on when vendor repayments can begin.
The initial strategy conversation is free with no obligation. In most cases we're paid by the lender on settlement; if a fee ever applies to your specific structure, it's disclosed in writing before you proceed.
No credit checks at this stage, no obligation. Tell us the purchase price, your deposit and what the seller has offered — we'll come back within one business day with a read on how lenders would treat the structure.
Either way, the structure should be settled before the contract of sale is signed. A strategy session with Pooja — no obligation, no fee.
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